Dave Ramsey’s radio show is among the most listened to in the nation. Millions tune in daily to hear the personal finance guru answer questions about a variety of money topics. Ramsey is best known for advocating avoiding debt and suggesting strategies for getting out of debt. He has also railed against the time-share industry, calling it one of the nation’s “scummiest” businesses.
Now, 17 of his listeners are suing Ramsey, accusing him of promoting a company that promised to help customers get out of time-shares, but which...
Dave Ramsey’s radio show is among the most listened to in the nation. Millions tune in daily to hear the personal finance guru answer questions about a variety of money topics. Ramsey is best known for advocating avoiding debt and suggesting strategies for getting out of debt. He has also railed against the time-share industry, calling it one of the nation’s “scummiest” businesses.
Now, 17 of his listeners are suing Ramsey, accusing him of promoting a company that promised to help customers get out of time-shares, but which they say defrauded them.
Money Expert Dave Ramsey Celebrates 25 Years On The Radio During A SiriusXM Town Hall at Sirius XM Nashville studios on Aug. 22, 2017 in Nashville, Tenn.
Anna Webber/Getty Images for SiriusXM
Ramsey’s endorsements of Reed Hein & Associates’ time-share exit service, which continued over the course of several years, were deceptive and he did not make clear that he was being paid millions of dollars to endorse it, the listeners’ lawsuit alleges. Reed Hein did business under the name Timeshare Exit Team and offered to help customers exit their time-shares in exchange for an upfront fee.
The 17 listeners are seeking more than $150 million in damages as well as class action status for their case, which was filed April 28 in a federal court in Seattle.
An attorney representing Ramsey and his company, the Lampo Group, which is also a co-defendant in the case, didn’t return multiple calls requesting comment. A spokesperson for Ramsey also didn’t return a request for comment.
Previously, Washington State Attorney General Bob Ferguson sued Bellevue-based Reed Hein in 2020 in King County Superior Court, accusing the company of deceptive practices and advertising. Reed Hein charged fees, ranging from just under $3,000 up to tens of thousands of dollars per “exit,” but promised to fully refund customers if it was unsuccessful, according to the attorney general. Reed Hein regularly reneged on that promise, according to the attorney general. In 2021, Reed Hein settled the case, entering into a consent decree and agreeing to pay $2.61 million.
In a separate case, in April, Reed Hein settled a class action lawsuit brought by former customers who accused the company of defrauding them. The former customers filed their lawsuit in 2021 in federal court in Seattle. They are represented by the same law firm, Seattle-based Albert Law, that represents the Ramsey listeners. An attorney representing Reed Hein in that case didn’t respond to a request for comment.
Endorsements. It is notoriously difficult to get out of time-shares. And the industry has been plagued by scandals and scams. Ramsey has railed against time-share companies on his radio show, calling their industry on May 20, 2021, “one of the scummiest, most horrible industries in America today. They rip people off. They mistreat their customers like no other.”
Ramsey promoted Reed Hein’s services as a way to get out of time-shares on his radio show and podcast as well as in online programs, seminars, and lectures, according to the lawsuit. These endorsements were allegedly deceptive because they did not make clear that they were paid endorsements, according to the lawsuit.
“The average consumer would not have understood that the Lampo Group received compensation for broadcasting the advertisements, nor that the statements were deceptive,” the lawsuit states.
In addition, Ramsey and his company should have known that Reed Hein’s claims about its services were false and that it engaged in deceptive practices, the lawsuit states. The lawsuit claims Ramsey received complaints from his listeners about their experiences with Reed Hein beginning in 2016.
The lawsuit says that Reed Hein paid Dave Ramsey and the Lampo Group more than $30 million to advertise Reed Hein to Ramsey’s listeners from 2015 to 2021.
It also names Happy Hour Media Group as a defendant. Reed Hein allegedly employed the Kirkland, Wash.-based media company for its marketing services. Representatives of Happy Hour Media Group did not respond to requests for comment.
Religion News Service first reported news of the lawsuit.
Write to Andrew Welsch at andrew.welsch@barrons.com